Wells Fargo is Still Freezing Bank Accounts!
Back in July, 2010 I reported on the 9th circuit case of Mwangi v. Wells Fargo Bank, N.A., "Wells Fargo Won't Stop Freezing Bank Accounts." Our local group of attorneys here in the Central District of California have it on good word from sources inside Wells Fargo's bankruptcy department that the bank continues to freeze accounts while the litigation case is reviewed by the bankruptcy court in Nevada. The Mwangi case has been remanded back to the bankruptcy court to determine whether Wells Fargo's continuation of the administrative freeze and retention of the account funds claimed exempt, in the absence of instructions from the trustee, was reasonable in light of the debtor's demand that the subject account funds be released for their use.
This is a case to watch as it affects all debtors filing bankruptcy, clients of Wells Fargo Bank, N.A. and the Automatic Stay under 11 U.S.C. § 362(a). On January 21, 2011 Christopher P. Burke, Esq. and Scott C. Borison, Esq. attorneys for Eric Mwangi and Pauline Mwicharo [Plaintiffs] filed case no. 11-01022-bam in U.S. Bankruptcy Court for the District Court of Nevada this Adversary Class Action Proceeding.
The allegation from the complaint alleges that Wells Fargo Bank acted in Willful Violation of 11 U.S.C. §362(a)(3). If the court determines Wells Fargo's conduct was a willful violation of the stay under §362(a), then the bankruptcy court will need to determine what, if any, damages the debtors are entitled to under §362(k)(1). We will keep you posted on the progress of this pending case and the outcome. In the meantime, don't bank where you owe money.
Wells Fargo froze my bank accounts the day after Ch 7 filing, back on 3/14/11. I had $6,000 401k hardship withdrawal in a savings account because I am a unemployed single mother on food stamps and had to pull money out of my 401k just to pay rent and utilities. Wells Fargo also froze my son's savings account of $68.00.
To rub salt in the wound, 2 wks after freezing my accounts they sent the money to the bankruptcy trustee. It took 4 wks of me writing the trustee himself to explain my situation and he sent the funds back to me in the form of a cashier's check. My attorney did nothing for me and was 'shocked' that Wells Fargo did this.
Needless to say, I fired my attorney and will cease doing business with Wells Fargo immediately.